My Favorite Way to Trade This Frenzied Market By Jonathan Rose, founder, Masters in Trading My headache got so bad, I ended up in the emergency room at Northwestern Memorial Hospital. That’s where a doctor plunged a needle into my spine… I was 33 years old. And I was a director of trading at a leading “prop” trading firm in Chicago. That just means we traded with our own money, instead of managing money for clients. My job was to manage the risk for the entire firm… with dozens of traders under my supervision. This was 2008. We were facing a catastrophic loss on one of our trades that could cripple our firm. I was in good health. And I had plenty of experience handling risk. But I had a queasy feeling about this trade. And I was developing a blinding headache. So, I went to my doctor. And she sent me to the hospital to get a spinal tap. It’s what you do if you’re worried someone has meningitis, a brain bleed, or other severe neurological issues. Luckily, the test revealed no serious medical condition – just extreme stress. At that time, our firm had $32 million in capital, and we had one oil trade on our books that put $15 million of that capital at risk. To make matters worse, there was little I could do to mitigate the risk. The trader who had placed it was the majority owner of the firm. And the $15 million on the line was his own money. He didn’t want to hear from a 33-year-old with a stress headache over his trade. In the end, the trade went sour. And our firm’s capital shrank from $32 million to $18 million. We eventually dug our way out of that hole. And two years later, we sold the firm to a billion-dollar hedge fund. But that near-death experience taught me a lesson I’ll never forget… As a trader, your goal is to survive first and make money second. That’s especially crucial when all hell breaks loose – like in 2008… or this past month. Since they peaked in late February, the S&P 500 and the tech-heavy Nasdaq just saw one of their fastest 10% drops in history. That’s scary for buy-and-hold investors. And it can wipe out inexperienced traders who banked on stocks going up. But as I’ll show you today, there’s a strategy you can use to profit in this choppy market… You just need to stop speculating on stocks’ direction – aka coin flips – and trade volatility itself. When you get creative like this, you don’t care if a stock goes up or down. You make gains when it moves a lot in either direction. It’s a strategy I used during the recent stock market sell-off to give my subscribers the chance to close out gains of 61%… 74%… and 78% while stocks were tanking. Even better, the longest holding time for these trades was three days. I’ll get into that in a moment… plus how you can apply this strategy to your own wealth-building journey. First, if you don’t know me, here’s a quick introduction. | Recommended Link | | | | There’s been a lot of buzz surrounding AI over the past couple of years – but there’s only ONE story you should be worried about. Whether you have $500 or $500,000, this radical new AI Innovation will have a direct impact on your wealth. Click here to learn more. |  | | Winner’s Mindset Over my nearly three decades as a professional trader, I’ve tested countless strategies. In 1997, I got my start as a floor trader at the Chicago Mercantile Exchange. I traded futures on the Nasdaq and S&P 500 during the dot-com boom and bust. (Futures are contracts that allow you to bet on where the market is headed.) This was back in the day of open outcry pits. If you’ve seen the Eddie Murphy movie Trading Places, you’ll recognize the shouting and frantic hand signals we used to execute trades. Then, in 2003, a group of top Chicago traders asked me to join their new prop trading firm. I was employee No. 6. By the time we sold the firm seven years later, I was one of the four partners. I was on top of my game. But I felt it was time for a break. So, I took a year off to train for the Ironman Wisconsin triathlon. I pushed myself to new heights every day – ultimately achieving my long-time goal of completing the race. I swam 2.4 miles in Lake Monona, biked 112 miles over city roads and rural highways, and then ran a 26.2-mile marathon through downtown Madison –140.6 grueling miles in total. Finishing the Ironman was a huge personal accomplishment. And it taught me that, with enough dedication and hard work, I could achieve anything. With this winner’s mindset, in 2011, I rented a seat on the floor of the Chicago Board Options Exchange. And I became a market maker at the largest options exchange in the world. (A market maker buys and sells stocks to keep markets efficient. They profit off the gap between the buy and sell price.) But it wasn’t until 2015 that I found my true passion – teaching individual investors how to trade like the pros. That’s when I launched Masters in Trading (MIT). At MIT, I host daily video livestreams at 11 a.m. ET, where I break down the day’s market action and highlight my favorite trade setups. (You can sign up for free here.) I also run a thriving online community of apprentice traders who support each other, share their progress, and chat with me in real time. (I’ve included some screenshots of their feedback below.) And in that community, we trade differently than you may be used to… Turn Volatility Into Profits When you think of traders, you probably think of folks taking big risks in the hope of earning big returns. And some traders are like that. They think a stock is going to go up or down… And they place a big trade that will pay off if they’re right. That may work once or twice. But these folks almost always crash and burn at some point. These are directional trades. You make money only if you guess the direction the stock will move – up or down. But as I mentioned, you can also trade volatility. These trades pay off when a stock moves a lot in either direction. Say you think a stock is going to move a lot in the near future. But you don’t know if it will go up or down. To profit, you can place two trades at the same time – one that pays off if the price rises, another that pays off when it falls. As one of my mentors taught me: Why bet on a coin flip when you can profit from both sides of the coin instead? I’ve refined this strategy through hundreds of trades, documenting returns that include… And I’ve had more success with this strategy during the recent stock market sell-off. For instance, I opened a two-way trade on Xponential Fitness (XPOF) on March 11. I closed it three days later for a 78% gain. I opened another two-way trade the same day on online coupon company Groupon (GRPN). And I closed it three days later for a 74% gain. A third trade, using a variant of this strategy, yielded a profit of 61% in three days. I know from the feedback I’ve been getting from my online community that this strategy is resonating. Take this message from MIT member Kate M.… 
Feedback like this makes my day. And some of my subscribers are making serious money. Take James S., who shared that he’s made nearly $400,000 as an MIT subscriber over the past two months. 
And here’s another thank-you note from a subscriber called John B.… 
It would take too long to get into all the details of how to profit from upticks in volatility through two-way trades here. If you want to see how I spot these trades in real time, you can join me – for free – every weekday morning at 11 a.m. ET on Masters in Trading Live. On these livestreams, you’ll get… - A professional trader’s morning check-in
- Insights into what sectors are moving the market
- Real-time setups you can follow in your account
If you’re interested in learning how to trade like a pro… and profit from volatility with trades like these… sign up for free here. I’ll see you on the next livestream. And remember, the creative trader always wins! Jonathan Rose
Founder, Masters in Trading
P.S. Transparency is one of our guiding lights at Masters in Trading. In the spirit of that, we’re proud to regularly publish our full track record… And I’ll do the same for you here. I support three trading advisories with different strategies. In each of these, folks can follow my trade recommendations in their own accounts. Since I launched my Earnings Advantage service in May 2024, I’ve maintained a 66% win rate across 27 recommended trades. The average gain across winners and losers is 48%. And the average holding period is 37 days. Since I launched my Divergence Trader service, also in May 2024, I’ve maintained a 75% win rate across 12 closed trades. The average gain across the winners and losers is 31%. And the average holding period is 39 days. I’m less happy with the returns on my Advanced Notice service. My win rate there is 47% across 53 closed trades. And the average gain across the winners and losers is just 2.8%. But I promised 10 triple-digit winners to new subscribers. And I’m happy to report that I’ve delivered 14 triple-digit gains already, with six weeks to go. We’re always working, always learning, and always improving at Masters in Trading. And part of that process is staying accountable. Membership to these advisories is closed for the moment. But for the first word on when it opens up again – and a bunch of free education that’ll make you a smarter, more creative trader – sign up for my free daily livestreams right here. | 
No comments:
Post a Comment